The  Normal 
School  Quarterly 


Series  6 


October,  1907 


Number  25 


The  Tariff  Question  in  American 
History 

By 

O.  L.  MANCHESTER 

UNIVERSITY  OF  ILLINOIS 

2 51915 

PRESIDENT'S  OFFICE 

Entered  August  18,  1902,  at  Normal,  Illinois,  as  second  class  matter, 
under  Act  of  Congress  of  July  16.  1894 

PUBLISHED  BYTHE  I LLINOIS  STATE 
NORMAL  UNIVERSITY,  NORMAL,  ILLINOIS 


NORMAL  SCHOOL  QUARTERLY 


Published  by  the  Illinois  State  Normal  University,  Normal,  III . 


Series  6 


October , 1907 


No.  25 


The  Act 
of  1789. 


The  Tariff  Question  in  American  History . 

Our  ship  of  state  under  the  Articles  of  Confederation 
stranded  upon  the  rock  of  revenue.  When  the  First  Con- 
gress met  under  the  Constitution  it  lost  no  time  in  providing 
revenue  for  the  government’s  support. 

The  preamble  of  this  first  tariff  act  states 
that  the  act  is  designed  to  provide  means 
for  the  support  of  the  government  and  for 
the  payment  of  its  debts,  and  to  provide  for  the  encourage- 
ment and  the  protection  of  manufactures.  The  act  was 
short  and  its  rates,  some  being  specific  and  some  ad  valorem , 
were  low. 

A few  months  later  the  House  of  Representatives  di- 
rected Alexander  Hamilton,  Secretary  of  the  Treasury,  to 
report  upon  the  subject  of  manufactures.  Two  years  after- 
wards his  report  was  sent  to  the  House.  It  is  generally  ad- 
mitted to  be  the  best  argument  for  protection  ever  written 
in  America. 


Mr.  Hamilton  maintained  that  agriculture  and 
manufacturing  were  pursuits  of  equal  value  and 
that  neither  could  flourish  at  its  best  without 
the  other.  Manufacturing  wrould  bring  the  di- 
vision of  labor  and  the  introduction  of  ma- 
chinery; it  would  lead  to  the  employment  of  classes  that  would  other- 
wise be  unengaged  in  industry;  would  increase  immigration.  It 
would  furnish  a steady  demand  for  the  produce  of  the  soil.  Foreign 


Hamilton’s 
Report  upon 
Manufactures. 


2 


The  Normal  School  Quarterly 


nations,  he  said,  were  trying  to  sell  us  everything  and  to  buy 
nothing  from  us.  If  Europe  would  not  buy  of  us,  we  must  contract 
our  wants  for  her  products.  That  manufactures  would  grow  up  here 
without  government  aid,  he  did  not  believe.  He  pointed  out  that 
the  influence  of  habit  and  the  spirit  of  imitation  in  men,  cause 
changes  in  occupations  to  be  made  more  tardily  than  is  consistent 
with  the  interest  of  individuals  or  with  the  interest  of  society;  that 
the  fear  of  failure  in  untried  enterprises  would  deter  the  very  capi- 
talists who  were  most  likely  to  succeed,  from  making  the  attempt. 
More  formidable  obstacles  still  were  the  superiority  already  enjoyed 
by  nations  that  had  preoccupied  and  perfected  the  chief  fields  for 
manufacturing  enterprise,  and  the  aids  of  various  sorts  granted  by 
foreign  nations  to  their  manufactories.  He  says:  “ Whatever  room 
there  may  be  for  an  expectation  that  the  industry  of  a people,  under 
the  direction  of  a private  interest,  will,  upon  equal  terms,  find  out 
the  most  beneficial  employment  for  itself,  there  is  none  for  a reliance 
that  it  will  struggle  against  the  force  of  unequal  terms,  or  will,  of 
itself,  surmount  all  of  the  adventitious  barriers  to  a successful  com- 
petition, which  may  have  been  erected,  either  by  the  advantages 
naturally  acquired  from  practice  and  previous  possession  of  the 
ground,  or  by  those  which  may  have  sprung  from  positive  regulations 
and  an  artificial  policy”.  . . .To  the  objections  that  manufacturing 
could  not  succeed  in  the  United  States  because  of  the  scarcity  of 
hands,  dearness  of  labor,  and  lack  of  capital,  he  replied:  Some  dis- 
tricts of  America  were  fully  peopled,  use  could  be  made  of  women 
and  children,  and  of  immigrants;  the  disparity  of  wages  here  and 
abroad  had  been  greatly  exaggerated,  and  the  cost  of  manual  labor 
was  becoming  continually  of  less  moment  in  consequence  of  the  in- 
creasing use  of  machinery;  the  lack  of  capital  could  be  overcome  by 
expanding  the  circulating  medium,  improving  credit,  attracting 
foreign  capital. . . .That  prices  of  manufactures  are  enhanced  by  im- 
port duties,  Mr.  Hamilton  said,  seemed  reasonable  in  theory,  but 
was  seldom  borne  out  by  the  facts.  High  prices  might  be  the 
temporary  effect  of  imposts  but  low  prices  were  the  ultimate  and 
inevitable  effect  of  every  successful  manufactory  established. . . .The 
establishment  of  manufactories  here  would  bring  benefits  to  all 
sections  of  the  country  and  to  all  classes  of  the  people.  Ideas  of  a 
contrariety  of  interests  were,  in  the  main,  as  unfounded  as  they 
were  mischievous.  The  independence  and  the  security  of  the  nation 
seemed  to  be  closely  connected  with  the  adoption  of  the  policy  of 
protection. 


The  Tariff  in  American  History 


3 


During  the  first  twenty  years  of  our 
Early  Acts  national  life  under  the  Constitution  at 

an<^  least  twenty  acts  that  had  to  do  with  the 

Protection.  tariff  were  passed.  The  motive  behind 

them  was  usually  a need  for  more  revenue.  How  far  the 
desire  to  protect  home  manufactories  figured  as  a sub- 
sidiary motive  has  been  a matter  of  much  dispute.  Pro- 
tectionists have  pointed  to  the  plain  wording  of  the  pre- 
amble of  the  Act  of  1789,  to  the  fact  that  many  of  the 
duties  were  laid  upon  articles  such  as  were  made  here,  to 
the  sentiment  in  favor  of  protection  to  be  noticed  in  many 
of  the  speeches  made  in  Congress  in  the  years  immediately 
following  Hamilton’s  report,  and  to  the  fact  that  Congress 
was  continually  beset  with  petitions  from  cities  praying  for 
protection.  Stanwood  (American  Tariff  Controversies  in 
the  Nineteenth  Century,  Vol.  I,  p.  71)  says:  It  seems  im- 
possible to  come  to  any  other  conclusion  than  that  the 
purposes  of  Congress  were  accurately  stated  in  the  pre- 
amble. On  the  other  hand  Benton  (Debates  of  Congress, 
Vol.  I,  p.  84,  Note)  says  that  every  speech  on  the  Act  of 
1789  showed  revenue  to  be  the  object  of  every  proposed 
duty,  protection  being  merely  incidental,  and  that  the  Act 
cannot  be  quoted  as  any  authority  for  the  protective  system 
that  later  so  disturbed  the  country.  It  is  to  be  noted  that 
the  rates  demanded  for  protection  were  moderate,  Hamilton 
himself  suggesting  no  ad  valorem  rate  above  fifteen  per 
cent,  and  suggesting  specific  duties  that  would  be  pro- 
hibitory, upon  only  a very  few  articles. 

That  it  had  been  the  English  policy, 
carried  out  with  a fair  degree  of  success, 
to  throttle  manufacturing  in  America 
during  our  colonial  period,  is  well  known.  During  the 
years  that  we  are  now  considering  Great  Britain  was  in  the 
midst  of  an  industrial  revolution  that  was  to  tighten  her 


Manufactures 
before  1808. 


4 


The  Normal  School  Quarterly 


grip  upon  the  prize — the  world’s  leadership  in  manufactur- 
ing. An  English  barber  had  discovered  a machine  that 
could  do  as  much  work,  in  the  textile  industries,  as  a thous- 
and spinsters;  a poor  wyeaver  had  caught  from  a spinning- 
wheel  tipped  over  by  children  at  play,  the  idea  that  led  to 
the  invention  of  the  spinning- jenny;  a duke,  disappointed  in 
love,  had  conceived  in  his  life  of  seclusion  the  scheme  that 
materialized  in  fully  three  thousand  miles  of  navigable 
canals;  a working  mechanic  at  Glasgow  had  seen  that  steam 
would  rush  into  and  expand  in  a vacuum,  and  the  steam- 
engine  was  the  result;  a farmer  boy  had  invented  the 
“mule;”  a clergyman,  the  power-loom;  when  men  had  been 
lacking  for  factory  operatives  the  greatest  English  states- 
man had  uttered  the  terrible  words  “Take  the  children;” 
the  greatest  economic  philosopher  of  England  had  written 
his  remarkable  book,  An  Inquiry  into  the  Causes  of  the 
Wealth  of  Nations.  England  did  not  intend  that  these  in- 
ventions of  Arkwright,  Hargreaves,  Watt,  Crompton,  and 
Cartwright,  should  be  shared  with  the  world.  She  passed 
the  most  stringent  laws  forbidding  the  exportation  of 
machinery  or  the  models  of  machinery. 

From  Hamilton’s  report  and  from  other  sources  we  may 
gather  the  condition  of  manufacturing  as  an  industry  in  the 
United  States  during  this  period  (before  1808).  We  had 
made  good  progress  in  ship-building,  were  doing  well  in 
manufacturing  leather,  boots,  harnesses,  gloves,  etc.;  we 
made  from  iron,  implements  of  husbandry,  household 
utensils,  tools,  anchors,  etc.;  we  manufactured  sugars, 
liquors,  wool  hats,  tin  utensils,  wagons,  brick  and  tiles,  and 
many  other  articles  of  the  cruder  sort.  The  textile  indus- 
tries were  almost  entirely  carried  on  in  the  household  tho 
carding  and  fulling  mills  were  many.  In  short  the  nation 
remained,  as  the  colonies  had  been,  mainly  agricultural. 
Our  imported  manufactures  were  paid  for  thru  agricultural 


The  Tariff  in  American  History 


5 


The  Period 
of 

Restriction, 
dition  of  things. 


exports  to  the  West  Indies  and  other  countries,  and  thru 
the  proceeds  of  our  carrying-trade  upon  the  ocean. 

Napoleon’s  Berlin  and  Milan  decrees,  the 
English  Orders  in  Council,  our  own  Em- 
bargo, and  Non-Intercourse  Act,  the  war 
of  1812-1815,  completely  changed  the  con- 
Our  foreign  trade  was  ruined.  What  we 
did  not  manufacture  ourselves  we  had  to  do  without.  Our 
exports  and  imports  for  1808  aggregated  less  than  one- 
third,  and  the  same  for  1814  less  than  one-twentieth  those 
of  1807.  These  years  of  restriction  gave  our  manufactories 
a wonderful  start.  The  first  cotton  factory  had  been 
started  in  1787  but  it  had  little  success.  Samuel  Slater  had 
brought  over  in  his  head  the  models  of  the  Arkwright 
machinery  and  succeeded  in  setting  it  up  here  in  1790. 
Whitney  invented  the  cotton-gin  in  1794.  Up  to  that  time 
cotton  had  been  little  cultivated  in  America.  Its  culti- 
vation increased  rapidly  after  the  invention  of  the  gin,  by 
means  of  which  one  man  could  do  the  work  that  had  re- 
quired fifty.  Before  this  period  we  had  made  of  cotton 
goods  only  an  insignificant  part  of  our  large  consumption. 
In  1808  there  were  but  four  cotton  factories  in  America.  In 
1812  there  were  within  a radius  of  thirty  miles  from  Provi- 
dence, fully  fifty.  The  consumption  in  bales  had  increased 
between  1800  and  1815  from  500  to  90,000  a year,  and  the 
latter  date  saw  500,000  spindles  in  operation.  The  history 
of  our  woolen,  iron,  glass  manufactories,  etc.,  was  much  the 
same — a small  start  before  this  period  and  a wonderful 
growth  during  it.  Thomas  Jefferson  wrote  to  John  Adams 
in  1812,  “Nothing  more  salutary  for  us  has  ever  happened 
than  the  British  obstructions  to  our  demands  for  their 
manufactures;”  and  again  to  Kosciusko  the  same  year, 
“Come  peace  when  it  will,  we  shall  never  again  go  to  Eng- 


6 


The  Normal  School  Quarterly 


land  for  a shilling’s  worth  of  goods  where  we  have  gone  for 
dollars’  worth.” 


In  1812  all  duties  were  doubled  as  a war 
measure  and  these  war  duties  were  contin- 
ued until  the  Tariff  of  1816  went  into  effect. 


The  Tariff 
of  1816. 


After  the  signing  of  peace,  notwithstanding  the  war  duties, 
large  importations  of  foreign  goods  began.  This  embar- 
rassed the  young  manufactories,  and  some  of  them  failed. 
Appeals  to  Congress  for  protection  were  many.  The  effect 
of  all  this  is  to  be  seen  in  the  Tariff  of  1816.  President  Madi- 
son in  his  annual  message  of  1810  had  viewred  with  satisfac- 
tion the  growth  of  manufactories,  seen  in  them  some  com- 
pensation for  the  loss  of  trade;  in  1815  he  held  that  the 
manufactories  should  be  considered  in  the  adjustment  of  the 
duties,  that  without  protection  lines  of  industry  may  fail  to 
spring  up  even  tho  we  are  particularly  fitted  to  carry  them 
on,  that  free  trade  tho  right  in  theory  admits  of  exceptions 
in  practice. 

The  Tariff  of  1816  was  moderately  protective — so  mod- 
erately that  James  G.  Blaine,  in  his  historical  argument  for 
protection  (North  American  Review,  1889),  classes  it  among 
free  trade  tariffs,  and  lays  to  it  the  hard  times  in  1819.  R. 
W.  Thompson,  in  his  History  of  the  Tariff,  repeatedly  asserts 
that  it  was  strongly  protective,  and  that  under  its  favorable 
influence  the  country  speedily  recovered  from  the  depression 
of  1819.  President  Monroe,  in  his  annual  message  of  1822, 
says  that  the  manufactories  of  the  country  seem  to  be  pros- 
pering again.  Mr.  Benton,  remarking  upon  the  passage  of 
this  so-called  Lowndes- Calhoun  bill  in  the  House,  says  (De- 
bates of  Congress,  Vol.  V.,  p.  645): 

And  thus  was  inaugurated  a new  policy. . . .Revenue  had  been  the 
object  of  import  duties,  and  protection  to  manufactures  the  incident. 
Now  this  policy  was  reversed.  Protection  became  the  object  and  rev- 


The  Tariff  in  American  History 


7 


enue  the  incident,  to  such  a degree  as  often  to  disregard  revenue  alto- 
gether. 

The  ad  valorem  duties  under  this  act  ranged  from  seven 
and  one-half  to  thirty  per  cent,  and  the  specific  rates  were 
even  higher.  Upon  cotton  and  woolen  goods  the  rate  was 
fixed  at  twenty-five  per  cent  for  three  years,  and  at  twenty 
thereafter.  On  cotton  cloths  some  minimum  duties  were 
established;  for  example,  cloth  costing  twenty-five  cents  or 
less  a square  yard  was  to  be  taxed  as  tho  costing  twenty-five 
cents.  When  in  the  course  of  a few  years  the  cost  of  manu- 
facture became  cheaper  this  rate  became  practically  prohibi- 
tory as  to  the  coarser  grades.  There  was  no  woolen  mini- 
mum and  there  was  a duty  on  raw  wool  that  partially  offset 
the  advantage  to  the  manufacturer  of  the  duties  upon  the 
imported  competing  manufactured  products.  The  iron  manu- 
factories were  not  favored  much  in  this  act  but  were  given 
higher  duties  in  1818.  The  equivalent  ad  valorem  rate  upon 
all  dutiable  goods  ran  about  thirty-three  per  cent;  on  all 
goods  free  and  dutiable  the  rate  ran  but  very  little  lower, 
for  the  free-list  was  small. 


The  Tariff 
Act  of  1824 


The  first  strong  popular  movement  for  pro- 
tection came  in  consequence  of  the  hard 
times  of  1819.  The  foreign  market  for  our 
agricultural  exports  was  poor,  and  the  demand  arose  for  pro- 
tection to  our  infant  industries  and  for  a home  market  for 
agricultural  products.  A high  tariff  bill  barely  failed  of  pas- 
sage in  1820.  The  question  had  become  a sectional  one,  the 
South  and  the  commercial  interests  of  New  England  oppos- 
ing, and  the  middle  and  western  agricultural  states  with  the 
manufacturing  interests  of  New  England  favoring  it.  The 
agitation  was  kept  up  until  the  so-called  Clay  Tariff  of  1824 
was  passed.  It  was  carried  by  the  votes  of  the  western  and 
middle  states,  with  those  of  Rhode  Island  and  Connecticut. 
This  act  raised  the  minimum  on  cotton  goods.  It  raised  the 


8 


Tl le  Normal  School  Quarterly 


duties  on  woolen  goods  but  raised  also  the  duty  on  raw  wool. 
Under  the  operation  of  this  act  the  equivalent  ad  valorem 
rates  on  dutiable  and  on  all  goods  averaged,  respectively, 
about  thirty -nine  and  about  thirty- six  per  cent. 

Henry  Clay,  author  of  this  bill,  and  4 'father  of  the  Amer- 
ican system/’  in  his  main  speech  for  it,  argued: 

In  casting  our  eyes  around  us,  the  most  prominent  circumstance 
which  fixes  our  attention  and  challenges  our  deepest  regret  is  the  gen- 
eral distress  that  pervades  the  whole  country.  It  is  forced  upon  us 
by  numerous  facts  of  most  incontestable  character.  It  is  indicated 
by  diminished  exports. . . . ; by  the  depressed  state  of  our  navigation; 
by  our  diminished  commerce;  by  successive  unthreshed  crops  of  grain 
. . . . ;by  alarming  diminution  of  the  circulating  medium;  by  numerous 

bankruptcies ; by  a universal  complaint  of  want  of  employment, 

and  a consequent  reduction  in  the  wages  of  labor;  by  the  ravenous  pur- 
suit after  public  situations . . . . ; by  the  reluctant  resort  to  the  peri- 
lous use  of  paper  money;  by  the  intervention  of  legislation ....  be- 
tween debtor  and  creditor;  and,  above  all,  by  the  low  and  depressed 
state  of  values . . . .which  have  sunk  ....  about  fifty  per  centum  within  a 
few  years.  This  distress  pervades  every  part  of  the  Union,  every  class 
of  society;  all  feel  it,  though  in  different  degrees.  It  is  like  the  at- 
mosphere which  surrounds  us— all  must  inhale  it,  and  none  can  escape 
it ....  It  is  most  painful  to  sketch  or  dwell  upon  the  gloom  of  this  pic- 
ture. But  I have  exaggerated  nothing.  Perfect  fidelity  to  the  orig- 
inal would  have  authorized  me  to  have  thrown  on  deeper  and  darker 

hues What  is  the  cause  of  this  wide-spreading  distress . . . . ? We 

are  the  same  people.  We  have  the  same  country.  We  cannot  arraign 
the  bounty  of  Providence.  The  showers  still  fall ....  The  sun  still  casts 
his  vivifying  influence  upon  the  land.  The  land  ....  yields  ....  its 
accustomed  fruits,  its  richest  treasures.  Our  vigor  is  unimpaired. 
Our  industry  has  not  relaxed  ....  Our  people  have ....  been  practising 
the  most  rigid  economy.  The  causes  of  our  affliction  are  human 
causes ....  The  causes  are  to  be  found  in  the  fact  that  we  have  shaped 
our  industry. ...  in  reference  to  an  extraordinary  war  in  Europe,  and 
to  foreign  markets  that  no  longer  exist.  ...  We  have  allowed  our 
resources  at  home  to  wither  in  a state  of  neglect. . . .Europe  has  no 
longer  occasion ....  for  American  commerce  . . . , the  produce  of  Amer- 
ican industry ....  The  greatest  want  of  civilized  society  is  a market 
for  the  sale ....  of  the  surplus  produce  of  its  labor  ....  The  object  of 


The  Tariff  in  American  History  9 

this  bill  is  to  create  a home  market  and  to  lay  the  foundations  of  a 
genuine  American  policy  ....  Foreign  nations  cannot,  if  they  would, 
take  our  surplus  product.  . . . Our  powers  of  production  are  increasing 
four  times  as  fast  as  their  powers  of  consumption..  ..  If  they  could 
take  it,  they  will  not.  The  policy  of  all  Europe  is  adverse  to  the 
reception  of  our  agricultural  produce ....  For  years  our  export  trade 
has  failed  to  grow  satisfactorily ....  Is  this  foreign  market,  so  incom- 
petent at  present,  likely  to  improve  in  the  future? It  must  become 

worse  and  worse  ....  Our  agriculture  is  our  greatest  interest ....  Can 
we  do  nothing  +o  invigorate  it?  ....  We  must  give  a new  direction  to 
some  portion  of  our  industry.  We  must  speedily  adopt  a genuine 

American  policy If  we  cannot  sell  we  cannot  buy  ....  Four-fifths 

of  our  people  make  comparatively  nothing  that  foreigners  will  buy, 
have  nothing  to  make  purchases  with  from  foreigners ....  It  is  vain 
to  tantalize  us  with  the  greater  cheapness  of  foreign  fabrics ....  A 
cheap  article  is  as  much  beyond  the  grasp  of  him  who  has  no  means 
to  buy  as  a high-priced  one . . . .Let  us  suppose  that  half  a million 
persons  are  now  employed  fabricating  articles  abroad  for  our  consump- 
tion   They  are  in  effect  subsisted  by  us;  but  their  actual  means  of 

subsistence  are  drawn  from  foreign  agriculture.  If  we  could  trans- 
port them  to  this  country their  demand  for  flour,  beef,  pork,  and 

other  articles  of  subsistence ....  would  exceed  our  total  export  of  last 

year What  activity  this  would  give  to  our  now  dispirited  farming 

interests! But  if  we  give  by  this  bill  employment  to  an  equal  num- 
ber of  own  citizens the  beneficial  effects  ....  will  be  nearly  dou- 

bled. 

Daniel  Webster,  in  reply,  said  he  did  not  know  where 
any  such  distress  existed.  In  the  New  England  states  was 
general  prosperity.  Prices  were  low  only  as  compared  with 
the  inflated  prices  measured  in  paper  after  the  war.  He 
denied  that  the  manufactories  needed  more  protection.  The 
protective  policy  might  be  all  right  within  bounds,  but 
carried  to  the  point  of  prohibition,  it  became  absurd. 

The  bitterness  of  the  South  towards  the  Clay  Tariff  can 
be  judged  from  the  following  expressions,  to  be  found  in  the 
speech  of  John  Randolph. : 

I speak  with  knowledge  of  what  I say,  when  I declare,  that  this 
bill  is  an  attempt  to  reduce  the  country  south  of  Mason  and  Dixon’s 


10 


The  Normal  School  Quarterly 


line  to  a state  worse  than  its  colonial  bondage;  a state  to  which  the 
domination  of  Great  Britain  was,  in  my  opinion,  far  preferable,  for 
the  British  Parliament  would  never  have  dared  to  lay  such  duties  up- 
on our  imports It  is  a sacrifice  of  the  interests  of  a part  of  this  nation 

to  the  ideal  benefit  of  the  rest.  It  marks  us  out  as  the  victims  of  a 
worse  than  Egyptian  bondage ....  and  I trust  it  will  be  met  in  the 
southern  country  as  was  the  Stamp  Act.  . . .1  do  not  stop  here  to  argue 
about  the  constitutionality  of  this  bill;  I consider  the  Constitution 
a dead  letter. . . .“You  may  intrench  yourself  in  parchment  to  the 
teeth,”  says  Lord  Chatham,  “the  sword  will  find  its  way  to  the  vitals 
of  the  Constitution”. . . .There  never  was  a constitution  under  the  sun, 
in  which,  by  an  unwise  exercise  of  powers  of  the  government,  the 
people  may  not  be  driven  to  the  extremity  of  resistance  by  force .... 
If,  under  a power  to  regulate  trade,  you  prevent  exportation;  if  with 
the  most  approved  spring  lancets,  you  draw  the  last  drop  of  blood 
from  our  veins;  if,  secundum  artem , you  draw  the  last  shilling  from  our 
pockets,  what  are  the  checks  of  the  Constitution  to  us?  A fig  for  the 
Constitution!  When  the  scorpion’s  sting  is  probing  us  to  the  quick, 
shall  we  stop  to  chop  logic?  Shall  we  get  some  learned  and  cunning 
clerk  to  say  whether  the  power  to  do  this  is  to  be  found  in  the  Con- 
stitution, and  then,  if  he,  from  whatever  motive,  shall  maintain  the 
affirmative,  like  the  animal  whose  fleece  forms  so  material  a portion 
of  this  bill,  quietly  lie  down  and  be  shorn?. . . .But  no  force— no  sir, 
no  force  short  of  Bussian  despotism,  shall  induce  me  to  purchase,  or, 
knowing  it,  to  use  any  article  from  the  region  of  the  country  which 
attempts  to  cram  this  bill  down  our  throats.  On  this  we  of  the  South 
are  resolved,  as  were  our  fathers  about  the  tea  that  they  refused  to 
drink. . . .If  any  gentleman  believe  that  I am  not  as  much  attached 
to  the  Union  as  any  man  on  this  floor,  he  labors  under  a great  mis- 
take. . . .But  there  is  no  magic  in  this  word  union.  I value  it  only  as 
the  means  of  preserving  the  liberty  and  the  happiness  of  the  people. 
The  marriage  of  Sinbad  the  sailor  with  the  corpse  of  his  dead  wife 
was  a union,  and  just  such  a union  as  this  will  be,  if,  by  a bare  ma- 
jority in  both  Houses,  this  bill  shall  become  a law. 


In  the  tariff  of  1824  the  woolen  manufac- 
turers were  favored  little  more  than  in  that 
of  1816.  There  wTere  heavy  importations 
of  woolen  goods  in  1825,  Now  came  a determined  fight  for 
woolen  minimum  duties.  A bill  barely  failed  of  passage  in 


The  Tariff 
of  1828. 


The  Tariff  in  American  History 


11 


1827  that  would  have  taxed  all  imported  woolen  goods  cost- 
ing between  forty  cents  and  two  and  one-half  dollars  as  tho 
worth  the  latter  amount,  at  thirty- three  and  one-third  per 
cent.  In  1828  John  Quincy  Adams  and  Andrew  Jackson 
were  the  candidates  for  the  presidency.  Each  was  claimed 
to  be  a friend  of  protection,  but  Adams  in  his  three  annual 
messages  had  omitted  to  say  anything  for  protection.  Jack- 
son  had  on  the  Democratic  ticket  with  him,  Calhoun,  whose 
hostility  to  protection  by  this  time  was  pronounced.  Adams 
came  from  a section  none  too  friendly  to  the  “American  sys- 
tem.” The  Democratic  ticket  needed,  in  order  to  win,  not 
only  the  votes  of  the  South  but  those  of  the  strong  protection 
states  of  the  middle  west.  It  is  claimed  that  the  bill  pre- 
pared by  Jackson’s  friends  in  Congress  was  never  intended 
to  pass;  it  had  been  loaded  with  provisions  so  distasteful  to 
New  England  that  it  was  not  expected  her  representatives 
could  vote  for  it.  The  Southern  congressmen  aided  in 
voting  down  amendments  offered  by  New  Englanders  and 
then  voted  against  the  measure  at  the  last.  It  was  thought 
to  throw  the  odium  of  the  bill’s  defeat  upon  New  England, 
and  that  this  would  hurt  the  presidential  chances  of  Adams  in 
the  "West.  In  the  end  enough  New  England  members,  in- 
cluding Webster,  voted  for  the  bill  to  let  it  thru.  This  tariff 
has  been  called  the  “tariff  of  abominations.”  The  cotton 
minimum  was  raised  again;  the  duties  upon  woolen  goods 
were  high,  tho  the  original  scheme  of  the  bill  of  1827  had 
been  knifed  by  the  insertion  of  a dollar  minimum.  For  the 
fiscal  year  ending  in  1830,  the  equivalent  ad  valorem,  rates 
were,  on  dutiable  goods,  48.9,  and  on  all  imports  45.3  per  cent. 
Adams’  fourth  annual  message,  written  after  his  defeat,  came 
out  squarely  for  protection. 


Southern 

Discontent. 


The  Tariff  of  1828,  altho  its  worse  features 
were  gotten  rid  of  during  the  two  or  three 
years  following,  hurried  on  to  its  acute 


12 


The  Normal  School  Quarterly 


stages  the  discontent  of  the  South.  In  the  summer  after  the 
passage  of  the  act,  Vice-President  Calhoun  developed  his 
theory  of  nullification.  It  became  the  basis  of  the  “South 
Carolina  Exposition.”  This  document  argued  that  the 
South  was  and  must  remain  agricultural,  that  there  must  be 
permanently  a conflict  of  interests  between  it  and  the  rest  of 
the  Union  as  to  the  tariff  policy,  that  in  consequence  Con- 
gress should  be  careful  not  to  exceed  its  constitutional  rights 
in  laying  imposts.  It  maintained  that  a state  had  the  right 
to  veto  a law  that  was  palpably  unconstitutional,  but  declared 
that  such  action  was  for  the  time  being  deferred  in  the  hope 
that  Congress  would  see  fit  to  repeal  the  obnoxious  law — a 
hope  that  was  strong  because  of  the  change  in  administra- 
tion close  at  hand. 

In  February,  1829,  South  Carolina,  thru  her  senators, 
Hayne  and  Smith,  presented  her  formal  protest  to  the 
Senate  of  the  United  States.  The  purport  of  the  protest 
was,  that  Congress  had  no  power  to  tax  the  people  at  its 
own  good  will  and  pleasure,  and  to  apply  the  money  raised 
to  objects  not  specified  by  the  Constitution;  that  the  power  to 
protect  manufactures  was  nowhere  given  to  Congress  and 
indeed  seemed  to  be  reserved  to  the  States;  that  tho  the 
power  to  regulate  commerce  might  be  so  exercised  as  to 
protect  domestic  manufactures,  yet  this  was  far  different 
from  a power  to  protect  them  eo  nomine;  that  even  tho  Con- 
gress had  the  right,  under  its  power  to  lay  imposts  or  to 
regulate  commerce  to  protect  manufactures,  yet  a tariff, 
the  operation  of  which  should  be  grossly  unequal  and 
oppressive,  would  be  an  abuse  of  power  incompatible  with 
the  principles  of  a free  government;  that  the  very  existence 
of  South  Carolina  as  a state  depended  upon  her  agriculture 
and  her  commerce;  that  lest  an  apparent  acquiescence  in 
the  system  of  protective  duties  be  drawn  into  a precedent, 
the  state  protested  against  it  as  unconstitutional,  oppressive, 
and  unjust. 


The  Tariff  in  American  History 


13 


On  the  last  days  of  January,  1830,  occurred  the  great 
debate  in  the  Senate  of  the  United  States  upon  nullification. 
Webster’s  Reply  to  Hayne  struck  a responsive  chord  in  the 
hearts  thruout  the  North.  In  April,  at  a banquet  on 
Jefferson’s  birthday,  Calhoun  and  his  sympathizers  tried 
their  new  doctrine  of  nullification  on  President  Jackson  and 
discovered  that  it  was  a terrible  misfit.  In  December  came 
Jackson’s  annual  message.  One  paragraph  read: 

The  power  to  impose  duties  on  imports  originally  belonged  to 
the  several  States.  The  right  to  adjust  those  duties  with  a view  to 
the  encouragement  of  domestic  branches  of  industry  is  so  completely 
incidental  to  that  power  that  it  is  difficult  to  suppose  the  existence 
of  the  one  without  the  other.  The  States  have  delegated  their 
whole  authority  over  imports  to  the  General  Government  without 
limitation  or  restriction,  saving  the  very  inconsiderable  reservation 
relating  to  their  inspection  laws.  This  authority  having  thus  en- 
tirely passed  from  the  States,  the  right  to  exercise  it  for  the  purpose 
of  protection  does  not  exist  in  them,  and  consequently  if  it  be  not 
possessed  by  the  General  Government  it  must  be  extinct.  Our 
political  system  would  thus  present  the  anomaly  of  a people  stripped 
of  the  right  to  foster  their  own  industry  and  to  counteract  the  most 
selfish  and  destructive  policy  which  might  be  adopted  by  foreign 
nations.  This  surely  can  not  be  the  case.  This  indispensable  power 
thus  surrendered  by  the  States  must  be  within  the  scope  of  the 
authority  on  the  subject  expressly  delegated  to  Congress. 


In  his  annual  message  of  1829,  President 
Jackson  had  expressed  regret  that  nations 
would  not  let  commerce  flow  in  the 


Tariff  Act 
of  1832. 


channels  to  which  individual  interest,  always  its  surest 
guide,  might  direct  it;  thought  the  correct  policy  was  to 
put  rates  where  they  would  insure  fair  competition;  and 
that  in  reducing  the  tariff  the  revenue  duties  should  be 
taken  off  first.  In  his  next  annual  message  he  said  that  re- 
venue should  be  the  main  object  of  duties  but  that  they 
might  properly  be  so  adjusted  as  to  afford  protection,  that 
in  the  adjustment  the  government  should  be  guided|by  the 


14 


The  Normal  School  Quarterly 


general  good  and  that  only  objects  of  national  importance 
should  be  favored;  those  having  to  do  with  national  defence 
deserved  attention  first,  and  where  other  manufacturers 
were  favored  the  aid  should  be  merely  temporary.  He  con- 
demned combinations  of  small  minorities  in  Congress  en- 
tered into  for  mutual  assistance  in  measures,  which  resting 
solely  upon  their  own  merits  could  never  be  carried.  In 
1831  he  urged  reductions  to  relieve  the  people  from  un- 
necessary taxes. 

Mr.  Clay,  now  a senator,  was  not  prepared  to  abandon 
protection.  He  admitted  that  the  revenue  must  be  reduced, 
but  maintained  that  it  must  be  done  without  reducing  pro- 
tective duties.  “To  preserve,  maintain,  and  strengthen  the 
American  system,  he  would  defy  the  South,  the  President, 
and  the  devil.”  So  Adams  reported  him  to  have  said.  He 
introduced  a resolution  instructing  the  Committee  on  Fi- 
nance to  prepare  a bill  that  would  reduce  the  revenue  by 
taking  off  the  duties  on  most  articles  not  coming  into  com- 
petition with  home-made  articles.  In  favor  of  the  reso- 
lution Mr.  Clay  said: 

Eight  years  ago  it  was  my  painful  duty  to  present  an  unexagger- 
ated picture  of  the  general  distress  pervading  the  whole  land  — If  I 
were  to  select  any  term  of  seven  years  of  the  most  wide-spread  deso- 
lation, it  would  be  exactly  that  term  of  seven  years  immediately  pre- 
ceding the  establishment  of  the  tariff  of  1824.  I have  now  to  per- 
form the  more  pleasing  task  of  exhibiting  an  imperfect  sketch  of  the 
existing  state  of  unparalled  prosperity.  On  a general  survey,  we  be- 
hold cultivation  extended,  the  arts  flourishing,  the  face  of  the 
country  improved,  our  people  fully  and  profitably  employed,  the 
public  countenance  exhibiting  tranquillity,  contentment  and  happi- 
ness. We  have  the  agreeable  contemplation  of  a people  out  of  debt; 
land  rising  slowly  in  value;  a ready,  tho  not  an  extravagant,  market 
for  all  the  surplus  productions  of  our  industry;  innumerable  flocks 
and  herds  browsing  and  gamboling  on  ten  thousand  hills  and  plains; 
our  cities  expanded,  and  whole  villages  springing  up,  as  it  were  by 
enchantment;  our  exports  and  imports  increased  and  increasing;  our 


The  Tariff  in  American  History 


15 


tonnage,  foreign  and  coastwise,  swelling  and  fully  occupied;  the 
rivers  of  our  interior  animated  by  countless  steamboats;  the  cur- 
rency sound  and  abundant;  the  public  debt  of  two  wars  nearly  re- 
deemed; and,  to  crown  all,  the  public  treasury  overflowing,  embar- 
rassing Congress  to  select  objects  which  shall  be  liberated  from  the 
impost.  If  the  term  of  seven  years  were  to  be  selected  of  the 
greatest  prosperity  which  this  people  have  enjoyed  since  the  estab- 
lishment of  the  present  Constitution,  it  would  be  exactly  that  period 
of  seven  years  which  immediately  followed  the  passage  of  the  tariff 
of  1824.  This  transformation  of  the  condition  of  the  country  has 

been  mainly  the  work  of  American  legislation If  the  extinction 

of  the  public  debts  means  the  subversion  of  the  American  system 
its  payment  will  be  the  bitterest  of  curses This  system  of  pro- 

tection began  upon  that  ever  memorable  4th  day  of  July,  1789.  A 
vast  majority  of  the  people  of  the  United  States  has  approved  and 

continues  to  approve  it The  question  is,  shall  we  break  it  down? 

The  great  principle,  which  lies  at  the  foundation  of  all  free 

government,  is  that  the  majority  must  govern;  from  which  there  is 
or  can  be  no  appeal  but  to  the  sword.  That  majority  ought  to 
govern  wisely,  equitably,  moderately,  and  constitutionally,  but 
govern  it  must,  subject  to  that  terrible  appeal.  If  ever  one  state  or 
a minority  of  the  states  can  by  menacing  the  Union  force  the  aban- 
donment of  great  measures,  from  that  moment  the  Union  is  practi- 
cally gone.  It  may  linger  on  in  form  and  name  but  its  vital  spirit 

has  fled  forever The  danger  to  our  Union  does  not  lie  on  the  side 

of  persistence  in  the  American  system,  but  on  that  of  its  abandon- 
ment. 


The  resolution  was  passed,  as  was  a law  of  the  general 
nature  that  it  proposed.  The  Tariff  of  1832  remained  in 
force,  as  we  shall  see,  but  about  ten  months.  Because  of 
the  increase  in  the  free  list  the  equivalent  ad  valorem  rates 
on  all  and  on  dutiable  goods  now  draw  apart,  the  former 
falling  much  more  than  the  latter. 

The  year  that  followed  was  an  ominous 
one.  A third  time  Calhoun  wrote  out  mi- 
nutely his  ideas  about  nullification.  He 
went  over  the  old  ground  again  and  one 
step  farther,  in  that  he  specified  just  how 


Nullification. 
Compromise 
Tariff  of 
1833. 


16 


The  Normal  School  Quarterly 


a state  should  go  at  it  to  nullify  an  act  of  Congress.  His 
first  communication  had  gone  to  the  legislature,  his  second 
to  the  people,  and  this  one  went  to  the  governor  of  South 
Carolina.  The  state  was  quick  to  act.  The  legislature 
called  a convention  of  the  people.  It  met  and  in  November 
passed  an  ordinance  of  nullification,  which  declared  the 
Tariff  Acts  of  1828  and  1832  4 ‘Null  and  void  and  no  law 
within  the  jurisdiction  of  South  Carolina;”  prohibited  the 
payment  of  imposts  after  the  first  of  February;  forbade, 
under  dire  penalties,  appeal  to  federal  courts;  declared  that 
any  attempt  on  the  part  of  the  United  States  to  employ 
force  would  sever  South  Carolina’s  connection  with  the 
Union. 

In  December  came  Jackson’s  annual  message.  It  fore- 
saw the  extinction  of  the  public  debt;  declared  that  where- 
ever  protection  exceeded  what  was  necessary  to  counteract 
the  regulations  of  foreign  nations  and  to  secure  articles 
necessary  in  war,  it  should  be  reduced  gradually  to  a 
revenue  basis;  that  perpetual  protection  was  not  desirable; 
that  the  whole  system  possibly  begot  a discontent  that  out- 
weighed its  benefits ...  A few  days  later  was  issued  his 
proclamation  to  the  people  of  South  Carolina.  It  showed 
the  false  and  fatal  character  of  the  nullification  doctrine, 
declared  that  the  laws  of  the  United  States  must  be  en- 
forced, and  ended  with  an  appeal  eloquent  and  tender 
enough  to  start  tears  in  a patriot’s  eyes  even  after  seventy 
years  have  fled.  Mr.  Hayne,  now  governor  of  South 
Carolina,  issued  a proclamation  of  his  own,  denouncing  that 
of  President  Jackson.  He  called  for  volunteers.  Federal 
soldiers  were  already  on  the  scene.  The  situation  had  in- 
deed become  critical.  The  two  men  who  could  end  the 
strife,  if  they  but  would,  were  in  the  Senate  of  the  United 
States:  Henry  Clay,  the  idol  of  the  Whig  party  of  the 
North;  the  other,  the  idol  of  more  than  his  own  state  in  the 


The  Tariff  in  American  History 


17 


South,  John  C.  Calhoun,  who  had  resigned  the  Vice-Presi- 
dency in  order  to  be  elected  to  the  Senate,  where  he  could 
be  in  the  thickest  of  the  fray.  Unfortunately  for  the 
country,  each  of  these  two  men  seemed  to  have  but  one 
idea  in  his  head — “and  this  so  big  that  he  could  not  turn 
it  over  to  examine  both  sides.”  How  was  it  all  to  end? 

In  the  House  a bill  prepared  after  Jackson’s  idea  was 
suffering  amendment  beyond  recognition;  the  Senate  had 
before  it  another  tariff  bill;  the  Force  Bill  was  being  quar- 
reled over  rather  than  debated;  less  than  three  weeks  of 
the  Twenty-second  Congress  remained;  then  the  nullification 
ordinance  of  South  Carolina  would  be  in  effect;  and  other 
southern  states  had  likewise  declared  the  tariff  laws  uncon- 
stitutional and  unjust — what  of  them?  February  12,  Mr. 
Clay  astonished  the  Senate  and  the  country  by  the  intro- 
duction of  his  Compromise  Bill.  Calhoun  seconded  him. 
March  2,  it  was  a law;  and  March  11,  the  Ordinance  of 
Nullification  was  repealed. 

The  bill  provided  that  from  all  rates  of  duty  exceeding 
twenty  per  cent,  one  tenth  of  the  excess  should  be  taken  off 
January  1,  1834,  another  tenth,  a third  tenth,  and  a fourth 
tenth,  each  after  two  years;  then  one-half  of  the  remaining 
excess  in  January,  and  the  other  half  in  July,  1842.  Mr. 
Clay  said  he  had  two  objects  in  offering  the  bill:  the  one 
was  to  save  the  Union;  the  other  was  to  save  the  American 
system  as  long  as  he  could.  In  the  election  returns  he  had 
read  its  doom.  The  hardest  thing  in  the  Act  for  Calhoun  to 
accept  was  a provision  for  home  valuation. 

The  bottom  rate  of  twenty  per  cent  estab- 
lished by  the  Compromise  Tariff  remained 
in  force  just  two  months.  The  Whigs  had 
come  into  power  again,  and  the  Tariff  of  1842  was  made 
strongly  protective,  its  rates  running  about  thirty-four  and 
about  twenty-eight  per  cent  respectively  on  dutiable  and  on 


Tariff 
of  1842. 


18 


The  Normal  School  Quarterly 


i 

all  goods.  The  Democrats  looked  upon  the  passage  of  this 
bill  as  a violation  of  good  faith,  claiming  that  the  consumer, 
after  he  had  put  up  with  high  rates  for  nearly  nine  years, 
supposing  that  the  final  twenty  per  cent  rate  would  last  in- 
definitely, was  now  cheated  out  of  the  benefit  in  consider- 
ation of  which  he  had  made  the  bargain.  The  Whigs 
pleaded  that  the  treasury  was  empty,  and  that  no  congress 
could  bind  the  hands  of  its  successors.  President  Tyler 
vetoed  two  bills,  which  would  have  raised  the  duties  with- 
out stopping  the  distribution  of  money  received  from  sale 
of  public  lands  among  the  states.  Taussig  says  of  this  Act 
(Tariff  History,  p.  113): 

It  had  not  such  a strong  popular  feeling  behind  it  as  had  existed 
in  favor  of  the  protective  measures  of  1824,  1828,  and  1832.  In  the 
farming  states  the  enthusiasm  for  the  home-market  idea  had  cooled 
perceptibly;  and  in  the  manufacturing  States  the  agitation  came 
rather  from  the  producers  interested  than  from  the  public  at  large. 
There  is  much  truth  in  Calhoun’s  remark  that  the  Act  of  1842  was 
passed,  — because  the  politicians  wanted  an  issue. 


As  the  infant  industry  and  the  home  market  arguments 
for  protection  were  losing  their  force  and  popularity,  a new 
argument  had  been  coming  to  the  front  and  appeared  for 
the  first  time  full-fledged  in  the  debates  on  this  tariff.  It 
was  the  pauper  labor  argument — the  argument  that  wages 
here  are  higher  than  in  Europe  and  that  the  discontinuance 
of  protection  would  mean  the  reduction  of  American  wages 
to  the  European  level.  Hitherto  protectionists  had  gener- 
ally argued  that  the  difference  in  wages  was  not  so  great  as 
usually  claimed,  and  not  sufficient  to  render  successful  com- 
petition on  our  part  in  the  end  impossible. 

The  election  of  1844  put  legislation  in  the 
hands  of  the  Democrats  and  brought  a 
notable  change  in  our  tariff  policy.  The 
main  principles  and  arguments  back  of  the  new  policy  may 
be  gleaned  from  the  messages  of  President  Polk  and  from 


Tariff 
of  !846. 


The  Tariff  in  American  History 


19 


the  Treasury  Report  of  Secretary  R.  J.  Walker,  in  1845. 
Of  these  papers  the  following  will  give  some  idea: 

Only  so  much  revenue  should  be  raised  as,  added  to  the  receipts 
from  the  sale  of  public  lands,  will  support  economically  the  govern- 
ment  No  duty  should  ever  be  placed  above  the  rate  that  will  yield 

the  largest  revenue.  Duties  above  this  revenue  limit  are  for  protec- 
tion in  the  main  and  are  not  constitutional.  They  are  not  authorized 
by  any  express  grant,  and  is  it  conceivable  that  such  immense  powers 
would  have  been  left  by  the  framers  of  the  Constitution  to  mere  in- 
ferences and  doubtful  constructions?  — Below  this  limit  there  may 
be  and  should  be  discriminations.  Some  articles  yield  the  largest  rev- 
enue at  rates  that  are  on  other  articles  wholly  or  partially  prohibitory 
. . , The  maximum  revenue  duties  should  be  placed  upon  luxuries. 
Taxation  should  be  in  proportion  to  property.  Of  indirect  taxes, 
unless  care  is  taken,  the  poor  will  pay  far  more  than  their  just  share. 
— All  minimum  and  specific  duties  should  be  done  away  with,  as 
thru  them  the  poorer  grades  of  goods  are  taxed  as  high  as  the  better 
grades.  A tax  of  thirty  dollars  assessed  on  all  houses  without  regard 
to  their  value  would  be  intolerable.  So  would  a provision  that  all 
houses  worth  less  than  five  thousand  dollars  should  be  taxed  as  tho 
worth  that  sum.  Specific  and  minimum  duties  are  no  better  in  prin- 
ciple— Duties  should  be  arranged  so  as  to  keep  the  equilibrium  of 

benefits  among  sections  of  the  country Two-thirds  of  the  taxes 

collected  in  increased  prices  from  the  people  under  the  existing  tariff 
law,  do  not  reach  the  treasury  at  all  but  are  paid  to  the  manufacturers. 
No  proposition  to  collect  any  such  amount  from  the  people  by  direct 
taxes  and  to  turn  it  over  to  the  manufacturers  would  be  entertained 
for  one  moment.  The  profits  in  manufacturing  are  double  those  in 
agriculture.  The  manufacturing  capitalists  do  not  number  more  than 
one-twentieth  of  one  per  cent  of  the  people,  from  whom  these  heavy 
taxes  are  collected.  The  occasional  fall  of  prices  under  a protective 
tariff  proves  nothing,  is  usually  due  to  improvements  in  machinery, 
etc.  To  measure  the  cost  of  our  protection  we  must  compare  prices 

at  home  and  those  abroad Wages  have  not  risen  under  the  law  of 

1842,  while  prices  have.  The  number  of  laborers  working  in  protect- 
ed industries  does  not  exceed  four  hundred  thousand The  Tariff  of 

1842  raises  more  revenue  than  is  needed,  imposes  many  prohibitory 
duties,  and  many  more  above  the  revenue  standard,  discriminates 
against  the  poor,  and  is  sectional  in  its  operation. 


20 


The  Normal  School  Quarterly 


The  Act  of  1846,  following  such  ideas,  sweeping  away 
all  minimum  and  specific  duties,  establishing  eight  classes  of 
goods  paying  rates  of  100,  40,  80,  25,  15,  10,  5 per  cent 
respectively,  a free  class,  and  unenumerated  articles  paying 
20  per  cent,  was  passed  by  the  votes  of  the  West  and  the 
South.  During  its  operation  the  equivalent  ad  valorem  rate 
on  dutiable  goods  averaged  a little  over  twenty-six,  and  on 
all  goods  a little  over  twenty-three  per  cent. 

President  Polk’s  annual  messages  speak  of  the  Act  as  having 
largely  increased  the  revenue,  increased  foreign  trade,  and  brought 
great  prosperity  in  all  industries.  President  Taylor  wanted  more  rev- 
enue, encouragement  to  manufacturers;  did  not  doubt  the  constitu- 
tionality of  protective  duties.  President  Filmore’s  messages  argued 
for  protective  duties.  President  Pierce  claimed  that  the  revenue  was 
becoming  greater  than  they  knew  what  to  do  with  and  pleaded  for 
reductions. 


Under  the  operation  of  the  Tariff  of  1846 
the  importations  had  tripled  and  the  reve- 
nue collections  doubled  in  ten  or  eleven 


Tariff 
of  1857. 


years.  The  Act  of  1857  was  passed  with  little  opposition. 
Said  President  Buchanan  in  his  inaugural  address:  “Our 
present  financial  condition  is  without  parallel  in  history.  No 
nation  has  ever  before  been  embarrassed  from  too  large  a 
surplus  in  the  treasury.”  The  new  law  kept  the  schedules 
of  the  preceding  law  but  reduced  the  rates  to  the  fol- 
lowing: 80,  80,  24,  19,  15,  12,  8,  4 per  cent.  Unenumerated 
goods  paid  15  per  cent.  There  were  some  shifts  from  one 
class  to  another.  New  England  united  with  the  South  in 
voting  for  this  bill.  The  equivalent  ad  valorem  rates  under 
this  law  ran  about  20  and  16  per  cent  on  dutiable  and  on  all 
goods  respectively.  These  low  rates  coupled  with  the 
diminished  importations  during  the  hard  times  following, 
did  not  yield  revenue  enough,  and  Buchanan’s  messages  in 
1858  and  in  1860  call  for  revision.  He  recommends  specific 
duties,  alleging  frauds  under  ad  valorem  rates. 


The  Tariff  in  American  History 


21 


It  is  sometimes  claimed  that  the  hard  times  of  1819,  1837, 
and  1857,  were  due  to  the  low  tariffs  of  1816,  1833-42,  1846, 
and  1857  (as  in  the  books  of  H.  C.  Carey,  and  in  the  historical 
argument  for  protection  by  James  G.  Blaine).  To  this 
Taussig  replies:  “Yet  no  fair-minded  person,  having  even 
a superficial  knowledge  of  the  economic  history  of  these 
years  can  entertain  such  notions.  The  crises  of  1837  and 
1839  were  obviously  due  to  quite  a different  set  of  causes .... 

The  tariff  had  nothing  whatever  to  do  with  them The 

crisis  of  1857  was  an  unusually  simple  case  of  activity,  spec- 
ulation, over-banking,  panic,  and  depression;  and  it  requires 
the  exercise  of  great  ingenuity  to  connect  it  in  any  way  with 
the  tariff  act.” 


The  War 
Tariffs. 


The  first  act  was  passed  by  the  House  be- 
fore there  was  an  expectation  of  war  and 
it  became  a law  before  war  began.  Mr. 
Morrill,  Chairman  of  the  Committee  on  Ways  and  Means, 
claimed  that  it  was  to  restore  practically  the  rates  of  1846 
but  to  make  the  duties  specific  instead  of  ad  valorem.  The 
Act  was  “not  asked  for  and  but  coldly  welcomed  by  the 
manufacturers.”  In  the  anxiety  to  get  the  specific  duties 
high  enough  so  that  they  would  be  the  equivalent  of  the  ad 
valorem  rates  of  1846,  they  were  placed  where,  as  it  proved, 
they  were  one-half  higher  on  dutiable  goods,  and  perhaps 
one-sixth  higher  on  all  imports,  than  the  duties  under  the 
law  passed  in  1846  were.  Then  began  the  war  and  for  four 
or  five  years  the  rates  climbed  up  steadily.  There  was  an 
ever  increasing  need  of  revenue,  a desire  to  offset  internal 
taxes  upon  manufactures,  a lack  of  time  for  careful  con- 
sideration, and  the  influence  upon  legislation  of  interested 
capitalitsts.  An  act  passed  in  1862  raised  the  rate  upon 
dutiable  goods  by  about  one-half,  and  the  rate  upon  all  goods 
by  about  one-third.  In  1864  the  rates  made  another  and  an 
equal  jump.  This  bill  was  debated  in  the  House  just  three 


22 


The  Normal  School  Quarterly 


days,  and  in  the  Senate  two  days.  Its  protective  rates 
remained  in  force,  in  the  main,  for  twenty  years  and  both 
rates  reached  about  the  same  height  that  the  rates  did 
under  the  so-called  Tariff  of  Abominations. 

Within  the  first  six  years  after  the  war 
practically  all  the  internal  revenue  taxes 
that  had  been  the  occasion  for  compen- 
satory protective  duties,  were  swept  away. 
Mr.  Morrill,  who  had  managed  the  acts  of  1861,  1862,  and 
1864,  in  the  House,  claimed  that  justice  now  demanded  that 
the  compensatory  duties  should  be  taken  off.  But  other 
questions  were  pressing,  the  manufacturers  opposed  re- 
ductions, the  matter  was  put  off  from  year  to  year,  the  Wells 
Bill,  which  would  have  made  a start  in  the  direction,  failed 
in  1867,  for  lack  of  a two-thirds  majority  in  the  House,  and 
people  became  more  and  more  habituated  to  the  continuance 
of  the  duties  that  in  the  beginning  had  been  intended  to  be 
temporary.  Some  reductions  were  made  in  1870,  but  mostly 
upon  revenue  articles.  In  1872,  in  answer  to  a demand  from 
the  West,  a bill  was  passed,  finally  with  the  consent  of  the 
manufacturers  who  feared  a more  strenuous  measure,  mak- 
ing a general  reduction  of  ten  per  cent,  coupled  with  a more 
sweeping  reduction  of  non- protective  duties.  The  hard 
times  of  1873  reduced  importations  and  revenue,  and  the  ten 
per  cent  reduction  was  rescinded  in  1875.  From  that  time 
on,  of  the  many  acts  introduced  and  debated,  no  one  had 
much  chance  of  passage,  until  The  Commission  Tariff  of  1883. 

President  Grant’s  messages  counsel  postponement  of  revision,  care 
not  to  disturb  home  production  that  affords  employment  to  labor  at 
living  wages  in  contrast  to  the  pauper  labor  of  the  Old  World.” 
President  Hayes’  messages  were  of  the  same  general  tenor.  In  1881 
President  Arthur  wrote  that  revision  was  necessary  and  favored  the 
appointment  of  a commission  to  recommend  a bill.  The  next  year  he 
declared  for  lower  duties  upon  cotton  and  woolen  goods,  silk  goods, 
iron  and  steel  manufactures,  etc.;  yet  he  said  we  should  be  careful 


Attempts 

at 

Reductions. 


The  Tariff  in  American  History 


23 


not  to  abandon  the  policy  of  protecting  and  aiding  American  labor. 

Taussig  says  of  the  Commission  Tariff  of  1883:  “Its 
general  character  connot  be  easily  described;  in  truth,  it  can 
hardly  be  said  to  have  had  any  general  character.  On  the 
whole,  it  may  be  fairly  described  as  a half-hearted  attempt 
on  the  part  of  those  wishing  to  maintain  a system  of  high 
protection,  to  make  some  concession  to  a public  demand  for 
a more  moderate  tariff  system.”  It  proved  that  the  act  ac- 
tually increased  the  ad  valorem  equivalent  rates.  The  Mor- 
ison  Horizontal  Reduction  Bill  was  defeated  in  1884  by  a com- 
bination in  the  house  of  the  Republicans  and  protection 
Democrats.  The  tariff  was  the  chief  issue  in  the  campaign 
of  1884  and  the  Democrats  won.  No  other  President  ever 
discussed  in  his  messages  the  tariff  to  such  length  as  did  Pres- 
ident Cleveland.  His  messages  during  his  first  term,  that  of 
1887,  being  entirely  devoted  to  the  tariff,  contained  among 
other  points  the  following: 

The  annual  revenue  is  ever  in  excess  of  our  needs.  It  is  a puzzle 
what  to  do  with  it.  No  more  bonds  are  due,  some  not  due  have 
been  bought  at  a premium,  the  interest  on  bonds  has  been  antici- 
pated, yet  accumulations  are  being  hoarded  in  the  treasury,  inviting 
to  lavish  expenditures,  to  schemes  of  plunder,  and  crippling  business 
thruout  the  country.  The  worst  thing  is  that  we  are  therein  aban- 
doning the  theory  of  our  free  institutions,  which  would  leave  to  every 
man  the  product  of  his  toil  minus  only  what  must  be  taken  for  the 
support  of  the  government.  The  case  is  becoming  one  of  ruthless 
extortion  and  culpable  betrayal  of  fairness  and  justice.  The  question 
is  not  one  of  theory  between  free  trade  and  protection.  It  is  a con- 
dition not  a theory  that  confronts  us.  Shall  we  reduce  collections  to 
to  our  needs?  The  internal  revenue  is  not  collected  from  articles  that 
are  really  necessaries.  There  is  no  complaint  as  to  it.  But  our  pres- 
ent tariff  laws,  the  vicious,  inequitable,  and  illogical  source  of  un- 
necessary taxation  ought  to  be  revised Seventy  per  cent  of  our  im- 

posts come  from  duties  upon  sugar,  wool,  silk,  iron  and  steel,  cotton, 
flax,  hemp,  jute,  and  their  manufactures.  The  average  rate  on  du- 
tiable goods  is  just  about  what  it  was  during  the  civil  war A sus- 

picion is  abroad  that  the  immense  fortunes  accumulated  in  this 


24 


The  Normal  School  Quarterly 


country  during  late  years  are  not  of  natural  growth.  The  scheme  lays 
a tax  upon  every  consumer  in  the  land  for  the  benefit  of  the  manufac- 
turer. The  excuse  is  that  protection  is  needed  for  “infant  industries,  ’ ’ 
which  never  seem  ready  to  discard  their  leading  strings.  New  re- 
cruits are  always  being  added  to  the  ranks  of  the  manufacturers  that 
want  favor,  efforts  for  reform  meet  stubborn  resistance..  .The  in- 
direct and  almost  stealthy  manner  in  which  these  taxes  are  collected 
conceals  their  true  nature  and  their  extent.  But  they  are  paid  by  the 
people  no  less  surely  when  added  to  the  price  of  the  things  that 
supply  their  wants,  than  if  paid  directly  to  the  tax-collector.  These 
tariff  laws  raise  the  price  to  the  consumer  of  all  articles  imported  and 
subject  to  duty,  by  precisely  the  sum  paid  in  such  duties.  The 
amount  of  the  duty  measures  the  tax  paid  by  those  who  purchase 
these  imported  articles.  Comparatively  few  use  imported  articles  but 
millions  use  similar  articles  made  at  home  and  pay  nearly  or  quite  the 
enhanced  price  which  the  duty  gives  to  the  imported  articles.  The 
duties  from  the  imported  articles  go  to  the  treasury,  but  those  who 
buy  domestic  goods  pay  the  tax  to  home  manufacturers.  Competi- 
tion at  home  often  is  strangled  by  trusts.  Where  combination  is 
necessary  to  keep  prices  up  it  is  proof  that  some  one  is  willing  to 
accept  lower  prices.  When  competition  at  home  keeps  prices  below 
the  point  of  importation,  it  is  proof  that  duties  are  not  needed  or  at 

least  that  reductions  can  be  made Classes  are  forming  here,  one  of 

the  very  rich  and  one  of  the  very  poor.  Corporations  are  becoming 
the  people’s  masters.  The  communism  of  the  rich  and  powerful  is  no 
better  or  less  dangerous  than  that  of  the  poor  and  needy. 

It  is  claimed  that  we  must  put  up  with  these  higher  prices  in 
order  that  our  laborer  may  be  protected  from  the  pauper  labor  of 
Europe.  About  2,600,000  out  of  our  17,400,000  workers  are  employed 
in  manufacturing  industries  that  claim  to  be  benefited  by  the  tariff. 
To  these  the  protectionist  makes  his  plea  to  save  their  employment 
by  resisting  a change.  The  laborer  is  interested  in  all  that  reduces 
the  cost  of  living.  Let  us  remember  that  when  looking  out  for  his 
protection.  He  is  a consumer  and  with  other  consumers  is  forced  to 
pay  enhanced  prices  for  nearly  everything  because  of  the  tariff.  We 
must  and  can  reduce  for  him  the  cost  of  living  without  curtailing  his 
chances  for  work  or  reducing  his  wages It  is  the  farmer  who  suf- 

fers most  under  these  laws.  He  manufactures  nothing,  but  pays  the 
increased  prices  for  manufactures.  His  own  products  must  struggle 
unprotected  in  the  markets  of  the  world.  The  farmer  is  told  he 
must  have  a high  duty  on  wool.  The  farmers  that  raise  no  sheep 


The  Tariff  in  American  History 


25 


thus  pay  tribute  bo  those  that  do  and  to  the  manufacturer.  The  few 
farmers  who  do  raise  sheep  pay  more  than  enough  in  increased  prices 
for  manufactures,  to  sweep  away  all  their  gains  from  the  higher  prices 
of  wool — Of  the  4,000  articles  now  taxed,  many  are  not  worthy  of 
attention  and  should  be  put  upon  the  free  list.  The  main  reductions 
should  be  upon  necessaries  and  upon  raw  materials;  the  compensatory 
duties  should  be  taken  off  the  finished  products,  and  this  will  cheapen 

production,  extend  our  sales  abroad,  relieve  the  market  at  home 

The  government  has  been  entering  into  partnership  practically  with 
its  favorites,  to  the  injury  of  the  masses.  The  favored  ones  refuse  to 
abate  one  iota  of  their  selfish  advantage  and  combine  to  control  leg- 
islation. Yet  there  should  be  no  sudden  changes  that  would  ruin 
vested  interests.  Our  manufacturers  should  consent  to  reductions 
lest  eventually  an  abused  people  insists  upon  a too  sweeping  rectifica- 
tion of  its  wrongs. 

The  Mills  Bill,  which  would  have  admitted 
The  McKinley  hemp,  flax,  lumber,  and  wool  free;  which 
Tariff  Bill.  would  have  abolished  many  compensatory 

and  specific  duties,  was  passed  by  the  Democratic  House  but 
defeated  in  the  Republican  Senate  in  1888.  The  Senate  pro- 
posed a further  extension  of  the  protective  system  and  the 
repeal  of  some  internal  taxes.  In  its  platform  in  1888  the 
Republican  party  declared  for  the  entire  repeal  of  the  inter- 
nal taxes  rather  than  the  surrender  of  any  part  of  the  pro- 
tective system.  The  election  was  fought  upon  the  tariff  ques- 
tion and  the  Republicans  won.  They  passed  the  McKinley 
Bill  in  1890. 

This  bill  worked  an  increase  in  the  protective  duties, 
extending  the  system  farther  than  during  the  war;  under  it 
the  equivalent  ad  valorem  rate  upon  dutiable  goods  rose  from 
about  45  to  about  49  per  cent.  The  bill  brought  down  the 
rate  upon  all  goods  from  about  29  to  about  21  per  cent.  Most 
of  this  fall  was  due  to  the  free  admission  of  sugar;  a bounty 
of  two  cents  a pound  was  paid,  however,  to  sugar-raisers. 
The  bill  raised  the  duties  upon  raw  wool,  also  those  upon 
woolen  cloths,  dress  goods,  carpets,  etc.  The  duties  upon 


26 


The  Normal  School  Quarterly 


linens,  and  upon  some  silk  goods,  were  raised,  as  were  those 
upon  such  grades  of  cotton  goods  as  had  ordinarily  been  im- 
ported; upon  the  cheaper  grades  of  cotton  manufactures,  and 
upon  iron  and  steel  manufactures  the  duties  remained  the 
same  or  were  somewhat  reduced.  The  bill  extended  the 
principles  of  minimum  and  compound  duties.  All  thru  it 
shows  a determined  effort  to  bring  about  the  establishment 
of  new  manufacturing  industries  in  this  country;  thus  it  was 
sought  to  encourage  the  home  production  of  tin  plate;  it  be- 
ing asserted  that  all  attempts  up  to  that  time  to  establish 
that  industry  had  been  thwarted  by  the  temporary  reduction 
of  prices  by  foreign  syndicates.  A reciprocity  provision 
was  added  to  the  bill  at  the  last  moment;  this  empowered 
the  President  to  re-impose,  by  proclamation,  certain  duties 
upon  sugar,  tea,  coffee,  hides  etc. , unless  our  exports  were 
received  upon  favorable  terms  by  the  countries  sending  us 
those  articles.  The  aim  was,  chiefly,  to  get  concessions  from 
South  American  countries. 

The  following  thoughts  are  to  be  found  in  Mr.  McKinley’s 
opening  speech  upon  his  bill: 

The  all-imporbant  question  in  the  campaign  of  1888  was  the  tariff 
question.  The  one  thing  that  election  settled  was  that  the  protective 
policy  should  be  secured,  that  any  revision  must  be  made  in  full  re- 
cognition of  the  principle  of  protection.  We  have  not  abolished  the 
internal  revenue  system,  tho  such  taxes  are  reduced  somewhat.  We 
have  extended  the  drawback  system.  Any  American  citizen  may  im- 
port any  raw  material,  manufacture  it  into  the  finished  product  and 
receive  back,  if  this  product  is  exported,  within  one  per  cent  the 
duty  he  paid  on  the  raw  material.  This  disposes  of  the  cry  that  the 
tariff  prevents  our  manufacturers  from  entering  the  foreign  market. 
Statistics  show  that  protective  tariffs  have  not  interrupted  our  ex- 
port trade  but  that  it  has  increased  under  them.  The  balance  of 
trade  has  been  in  our  favor  during  the  protective  tariff  periods  of  our 
history,  and  usually  against  us  under  revenue  tariff  periods.  The 
main  objections  to  this  bill  come  from  importers  and  from  foreigners. 
It  will  diminish  the  importation  of  foreign  competing  goods.  We  do 


The  Tariff  in  American  History 


27 


not  conceal  the  purpose  of  this  bill— but  we  want  our  own  country- 
men and  all  mankind  to  know  it.  It  is  to  increase  production  here, 
to  diversify  our  productive  enterprises,  enlarge  the  field,  and  increase 
the  demand  for  American  workmen.  This  is  an  American  bill,  made 
for  the  American  people  and  for  American  interests.  We  do  not  dep- 
recate the  value  of  foreign  trade— but  is  not  an  American  consumer  a 
better  customer  for  us  than  a foreign  consumer?  Yet  our  foreign 
trade  was  never  so  great  as  today.  Since  1870  it  has  increased  two 
and  one-half  times  as  fast  as  that  of  Great  Britain.  Yet  our  domestic 
trade  is  ninety-five  per  cent  of  our  whole  trade.  We  try  nations  as 
they  appear  on  the  balance-sheet  of  the  world.  We  try  systems  by 
results;  we  are  too  practical  a people  for  theory.  After  twenty-nine 
years  of  protective  tariff  laws  we  find  ourselves  enjoying  a prosperity, 
the  like  of  which  has  never  been  seen  before,  either  here  or  elsewhere. 
Our  workman  deposits  seven  dollars  in  the  savings-bank  while  the 
English  operative  deposits  one  dollar.  We  lead  all  nations  in  agricul- 
ture, in  mining,  in  manufacturing.  There  is  no  nation  in  the  world 
where  the  reward  is  given  to  the  labor  of  men’s  hands  and  to  the  work 
of  their  brains  that  is  given  in  the  United  States.  No  sane  man  will 
give  up  what  he  has  for  what  is  promised  by  your  theories. 

President  Harrison  in  his  annual  message  of  1890,  praised  the  reci- 
procity clause,  claiming  that  it  would  have  been  an  unpardonable  er- 
ror for  us  to  have  taken  off  the  duties  from  coffee,  tea,  hides,  and 
sugar,  without  demanding  a fair  return  as  regards  the  acceptance  of 
our  products  by  the  countries  producing  the  above  articles.  In  1891 
he  wrote  that  the  act  was  fulfilling  the  prophecies  of  its  friends,  that 
our  foreign  commerce  was  unparalleled,  the  free  list  large,  prices  not 
advanced,  labor  splendidly  paid. 


Wilson 
Tariff 
of  1894. 


One  month  after  the  McKinley  Bill  went 
into  effect  the  congressional  elections 
resulted  in  a sweeping  Democratic  victory. 
The  House  of  Representatives  became 
democratic,  almost  three  to  one.  Two  years  later  a Demo- 
cratic president  was  elected,  and  the  Senate  became  demo- 
cratic. For  the  first  time  since  the  war  the  party  opposed 
to  a high  protective  tariff  controlled  every  branch  of  the 
government.  Grover  Cleveland  in  his  annual  message,  1893, 
said:  “ After  a hard  struggle  tariff  reform  is  directly  before 


28 


The  Normal  School  Quarterly 


us.”  He  reiterated  his  arguments  for  free  raw  materials, 
reduction  of  taxation  upon  the  necessaries  of  life,  etc.  The 
bill  reported  in  the  House  by  the  ways  and  means  committee 
faithfully  followed  the  recognized  Democratic  program — 
free  raw  materials,  extinction  of  compensatory  duties,  gen- 
eral reductions,  especially  upon  the  necessaries  of  life.  It 
provided,  too,  for  an  income  tax.  The  House  promptly 
passed  the  bill. 

In  the  Senate  the  sailing  was  not  smooth.  That  body 
was  closely  divided  politically.  The  votes  of  the  three  or 
four  populists  were  not  to  be  relied  upon.  Old  animosities 
dating  back  to  Cleveland’s  first  administration  still  lived. 
The  stormy  special  session  of  the  preceding  summer,  when 
the  purchase  clause  of  the  Sherman  Act  had  been  repealed, 
had  left  its  sores.  The  Louisiana  senators  were  opposed  to 
free  sugar,  the  Maryland  and  the  West  Virginia  senators  to 
free  coal,  the  Alabama  senators  to  free  iron  ore;  one  of  the 
senators  from  New  York  to  the  income  tax;  several  senators 
from  different  states  to  free  wool.  The  bill  was  referred  to 
the  finance  committee,  thence  to  a sub-committee  (Jones, 
Vest  and  Mills);  for  three  days  its  advocates  behind  closed 
doors  in  the  Democratic  caucus,  argued,  appealed,  threat- 
ened; then  came  forth  a bill  that  in  spite  of  its  wounds  and 
scars  was  still  called  the  Wilson  Bill.  Coal  and  iron  ore  were 
no  longer  on  the  free  list;  a duty  had  been  put  on  sugar;  the 
rates  on  many  schedules  had  been  materially  raised.  The 
Senate  passed  the  bill,  it  went  to  a conference  committee, 
there  was  a disagreement,  Chairman  Wilson  reported  the 
disagreement  in  the  House,  reading  a letter  from  President 
Cleveland,  in  which  it  appeared  that  the  writer  looked  upon 
the  defection  of  certain  Democratic  senators  as  treacherous 
and  dishonorable.  Senator  Gorman  of  Maryland  made  his 
notable  speech  in  answer.  In  the  end  the  House  had  to  ac- 


The  Tariff  in  American  History 


29 


cept  the  Senate’s  terms.  The  bill  became  a law  without  the 
President’s  signature. 

The  Act  as  finally  passed  put  wool  upon  the  free  list  and 
swept  away  the  compensatory  duties,  with  whatever  dis- 
guised protection  they  contained,  from  the  woolen  manufac- 
tures. The  ad  valorem  rates  upon  the  same  were  in  the  main 
kept  as  they  had  been  upon  goods  where  competition  really 
might  be  expected  to  occur.  In  other  places  they  were 
somewhat  reduced.  The  duties  upon  other  textile  manufac- 
tures were  really  reduced  but  little  if  at  all.  There  were 
many  nominal  and  ineffective  reductions.  Coal  and  iron  ore 
were  taxed,  but  at  a lower  rate  than  formerly.  Lumber  and 
copper  were  admitted  free,  the  latter  provision  at  least  be- 
ing of  little  consequence.  The  duty  on  tin  plate  was  reduced 
one-half.  The  reduction  of  duty  on  pig  iron  and  on  steel 
rails  still  left  the  rates  prohibitory.  Rates  upon  chinaware 
and  earthware  were  considerably  reduced.  The  bounty  on 
sugar  was  abolished  and  an  impost  of  40  per  cent  ad  valorem 
put  on  raw  sugar;  an  additional  duty  of  one-eighth  of  one 
cent  per  pound  was  laid  on  refined  sugar,  with  an  extra  one- 
tenth  of  a cent  upon  such  as  came  from  countries  that  paid 
sugar  bounties.  It  was  popularly  considered  that  this  was  a 
surrender  to  the  sugar  trust.  The  provision  of  the  Act  tax- 
ing all  incomes  exceeding  $4,000  was  later  declared  uncon- 
stitutional by  the  Supreme  Court,  on  the  ground  that  it  was 
a direct  tax  and  was  not  apportioned  among  the  states  ac- 
cording to  population.  The  Wilson  Bill  brought  down  the 
equivalent  ad  valorem  rate  upon  dutiable  goods  to  about  41 
per  cent;  the  rate  on  all  goods  was  reduced  but  very  slightly. 
The  policy  of  reciprocity  was  abandoned. 

The  election  of  1896  was  fought  upon  the 
silver  question.  Their  victory  gave  the 
Republicans  control  again.  Upon  the  mon- 
ey question  they  could  not  and  did  not  need  to  legislate, 


The  Dingley 
Tariff  of  1897. 


30 


The  Normal  School  Quarterly 


but  it  was  otherwise  as  to  the  tariff.  Uncle  Sam’s  expenses 
were  running  higher  than  his  ordinary  receipts.  The  de- 
ficit had  first  appeared  during  the  last  year  of  the  McKinley 
law,  due  to  decreased  importation  because  of  the  hard  times 
and  because  the  elections  had  foreshadowed  lower  rates.  It 
continued,  tho  perhaps  growing  less,  during  the  operation 
of  the  Wilson  tariff.  The  Supreme  Court’s  decision  that  the 
income  tax  was  unconstitutional  destroyed  all  chance  of  rev- 
enue from  that  source.  The  treasury  was  replenished  only 
by  taking  for  use  the  notes  redeemed  with  the  gold  obtained 
thru  the  sale  of  bonds.  President  McKinley  called  a special 
session  of  Congress  and  asked  for  tariff  legislation.  The 
bill  passed  was  essentially  a return  to  the  policy  of  the 
McKinley  bill;  indeed  it  went  a little  farther  than  the  latter 
bill  had  gone,  the  equivalent  ad  valorem  rates  upon  dutiable 
goods  having  mounted  higher  during  the  years  of  its  opera- 
tion than  during  any  other  years  in  our  history,  and  av- 
eraging about  50  per  cent. 

For  the  fiscal  year  ending*  with  June,  1906,  our  imports  were 
valued  at  $1,213,417,649.  The  g*oods  imported  free  were  valued  at 
45.22  per  cent  of  the  total  value.  The  dutiable  goods  paid,  at  an 
average  equivalent  ad  valorem  rate  of  44.16  per  cent,  $293,910,395  in 
duties.  This  was  $3.49  for  each  man,  woman,  and  child  in  the  United 
States.  During  the  fiscal  year  ending  in  June,  1899,  the  rate  upon 
dutiable  goods  touched  the  top  notch  in  our  history,  52.07  per  cent. 
The  high  rate  has  not  diminished  importation,  the  value  of  our  im- 
ports for  the  last  six  years  having  been  greater  than  during  any 
other  six  consecutive  years.  The  equivalent  ad  valorem  rate  upon  all 
goods  is  averaging  about  26.  It  is  important  to  remember  that 
when  rates  are  so  high  as  to  be  prohibitory,  they  cut  no  figure  in  the 
ad  valorem  rates  quoted.  The  principal  articles  admitted  free,  with 
a figure  after  each  that  represents  the  value  of  the  importation  in 
round  millions,  were  as  follows  for  the  fiscal  year  ending  June  30, 
1906:  coffee,  73;  raw  hides  and  skins,  62;  silk,  unmanufactured,  and 
bolting  cloths,  54;  unmanufactured  India  rubber  and  gutta  percha, 
48;  chemicals,  drugs,  dyes,  medicines,  n.  e.  s.,  48;  unmanufactured 
vegetable  fibers  and  textile  grasses,  37;  copper,  unmanufactured,  33; 


The  Tariff  in  American  History 


31 


tin  in  bars,  pigs,  etc.,  31;  tea,  15;  undressed  furs  and  skins,  13;  fruits 
and  nuts,  n.  e.  s.,  13. 

The  following  will  show  from  what  articles  we  collect  the  largest 
amount  in  duties,  the  value  of  the  importations  of  each,  and  the 
equivalent  ad  valorem  rate  for  each. 

ARTICLE  VALUES  DUTY  COLLECTED  RATE 

1.  Sugar  and  molasses $86,032,686 $52,594,731 61 

2.  Wool,  and  manufactures  of 63,265,115 37,968,695 60 

3.  Manufactures  of  cotton 61,756,361...,  33,349,342 54 

4.  Tobacco,  and  manufactures  of..  22,917,352 23,927,701 104 

5.  Silk,  and  manufactures  of 32,591,910 17,351,095  53 

6.  Fibers,  grasses,  and  manufs.  of.  53,010,920 19,242,164 36 

7.  Liquors  and  spirits 18,302,783 13,528,212 74 

8.  Iron,  steel  and  manufs.  of 30,579,453  9,784,043 32 

9.  Earthen,  stone,  and  chinaware..  12,805,945  ...  7,542,252 59 

10.  Chemicals,  drugs,  dyes,  n.  e.  s...  25,455,116 6,770,869 27 

From  the  above  ten  classes  we  collect  three-fourths  of  the  total 

collected  in  duties.  Other  important  articles  are:  fruits  and  nuts, 
n.  e.  s.;  leather,  and  manufactures  thereof;  wood,  and  manufactures 
of;  glass  and  glassware;  hides  of  cattle;  diamonds  and  other  precious 
stones. 

No  duties  have  caused  more  discussion  during  late  years  than 
those  upon  wool  and  the  manufactures  of  wool.  The  present  law 
took  raw  wool  off  the  free  list,  made  three  classes  of  wool,  taxing 
that  of  the  first  class  11  and  that  of  the  second  12  cents  a pound; 
wool  of  class  three  is  of  two  grades,  one  taxed  4 and  the  other  7 
cents.  The  equivalent  ad  valorem  rate  for  1906  upon  raw  wool  was 
43.5.  Upon  manufactures  of  wool  the  rates  are  compound;  thus, 
upon  Brussels  carpet,  44  cents  a square  yard  and  40  per  cent  ad 
valorem.  The  four  important  classes  of  woolen  manufactures  import- 
ed are  women’s  dress  goods,  cloths  for  men’s  wear,  carpets,  and 
ready-made  wearing  apparel.  The  equivalent  ad  valorem  rates  upon 
these  were,  respectively,  for  1906,  103,  97,  61,  and  82  per  cent.  Many 
of  the  rates  are  prohibitory;  thus  almost  the  only  carpets  imported 
are  those  made  whole  for  rooms,  and  the  importations  of  dress  goods 
and  cloths  are  almost  entirely  of  the  finer  qualities.  This  does  not 
mean,  of  course,  that  the  prices  of  cheaper  goods  may  not  be  in- 
creased to  the  consumer  because  of  rates  that  are  prohibitory. 

The  government  reports,  to  analyze  the  workings  of  the  present 
tariff,  group  all  articles  imported  into  six  classes:  Class  A,  consisting 


32 


The  Normal  School  Quarterly 


of  foodstuffs  in  crude  condition  and  of  food  animals;  Class  B,  pre- 
pared foodstuffs;  Class  C,  crude  materials  for  use  in  manufacturing; 
Class  D,  manufactures  for  further  use  in  manufacturing;  Class  E, 
manufactures  ready  for  consumption;  Class  F,  miscellaneous  articles, 
the  class  being  of  little  consequence.  In  Class  A the  most  import- 
ant articles  are  coffee,  tea,  unground  spices,  bananas,  and  cocoa,  all 
of  which  are  admitted  free;  lemons,  oranges,  walnuts,  etc.,  are 
dutiable.  Sugar  is  the  all-important  article  of  Class  B and  is  heavily 
taxed,  as  too,  are  malt  liquors,  distilled  spirits,  and  wines.  Of  Class 
C,  various  chemicals,  drugs,  and  dyes,  cotton,  uncut  diamonds, 
manilla  and  sisal  grass,  jute,  undressed  furs  and  skins,  goatskins, 
hides  other  than  those  of  cattle,  India  rubber,  and  raw  silk  all  come 
in  free;  but  tobacco,  wool,  and  hides  of  cattle  are  dutiable.  This 
class,  furnishing  as  it  does  the  raw  materials  for  manufacture,  is  in- 
creasing rapidly  in  importance,  at  present  furnishing,  by  value,  one- 
third  of  our  imports.  Class  D contains,  among  articles  that  are  ad- 
mitted free,  sodium  nitrate,  tin  and  copper  in  pigs,  bars,  etc.; 
among  dutiable  articles,  diamonds  and  other  precious  stones,  cut  but 
not  set,  iron  in  pigs,  or  ingots,  tin  or  terne  plates,  certain  chemicals, 
furs,  leather,  spun  silk,  etc.  This  class  too  is  growing  in  import- 
ance. Class  E furnishes  two-fifths  of  all  dutiable  and  one-fourth  of  all 
goods  imported.  Less  than  one-tenth  of  the  class,  by  values,  comes 
in  free,  and  these  free  goods  consist  mostly  of  products  of  the  United 
States  returned  from  abroad,  of  household  effects,  scientific  appa- 
ratus, specimens,  etc.  Manufactures  of  cotton,  wool,  silk,  fibers, 
leather,  paper,  iron  and  steel,  glass,  chinaware,  etc.,  are  dutiable. 
This  class  is  decreasing  in  relative  importance. 


Exports  of 
Manufactures. 


If  we  may  believe  the  figures  of  the  great- 
est statistician  of  our  greatest  rival  nation, 
we  easily  rank  first  as  a manufacturing 
nation.  Mr.  Mulhall  twelve  years  ago  credited  us  with  a 
product  as  great  as  that  of  England  and  Prance  combined. 
This  happens  not  only  because  we  have  more  workmen  en- 
gaged in  manufacturing  industries  but  because  the  average 
output  per  employee  is  nearly  three  times  the  English  aver- 
age. Our  home  consumption  of  manufactures  is  enormous 
and  we  do  not  rank  first  by  any  means  in  the  exportation  of 
manufactures.  The  splendid  iron  ores  of  the  Lake  Superior 


The  Tariff  in  American  History 


33 


regions,  their  marvelously  cheap  transportation  on  the 
Great  Lakes,  the  immense  scale  on  which  iron  and  steel 
manufacturing  has  been  carried  on,  have  enabled  us  to  con- 
tend with  fair  success  against  England  and  Germany  in  the 
markets  of  the  world,  and  our  exports  of  iron  and  steel  pro- 
ducts increased  four  or  five  hundred  per  cent  between  1890 
and  1900,  when  (in  1900)  we  exported  such  products  to  a 
value  of  $122,000,000.  This  is  perhaps  half  the  value  of 
England’s  exports  in  the  same  line.  Refined  mineral  oil  is 
the  next  largest  item  in  the  list  of  our  exports  of  manu- 
factures. The  Standard  Oil  Company  divides  with  Russian 
producers  the  markets  of  the  world.  The  next  item  is 
copper.  We  produce  half  the  copper  of  the  world.  The 
next  item  is  leather  and  its  manufactures.  The  next  is 
cotton  manufactures;  altho  we  raise  eighty  per  cent  of  the 
world’s  cotton,  and  consume  more  raw  cotton  than  England, 
yet  our  exports  of  manufactured  cotton  are  only  about 
seven  per  cent  of  those  of  England.  This  is  the  only 
textile  line  in  which  we  have  done  anything  in  exportation. 
Our  export  of  agricultural  implements  comes  next.  How 
much  our  protective  system  has  had  to  do  with  our  wonder- 
ful development  in  manufacturing  industries  is  an  undeter- 
mined question.  It  is  clear  that  we  are  doing  the  best  in 
meeting  foreign  competition  in  those  lines  where  we  are  ad- 
vantageously situated  as  to  raw  materials. 

We  have  made  four  tests  of  the  policy  of 
Reciprocity.  reciprocity;  we  had  a reciprocity  treaty 
with  Canada  from  1855  to  1866,  under  which  certain  important 
articles  from  either  country  were  admitted  free  by  the 
other;  we  had  a reciprocity  treaty  with  Hawaiian  Islands 
from  1879  until  their  annexation  in  1900,  by  virtue  of  which 
we  admitted  their  sugar  and  other  tropical  products  free  in 
return  for  like  favor  shown  our  foodstuffs,  provisions, 
manufactures,  etc.;  under  the  provisions  of  the  McKinley 


34 


The  Normal  School  Quarterly 


law  agreements  were  made  during  the  first  year  or  two 
after  its  passage  with  Brazil,  Cuba  and  Porto  Rico  (thru 
Spain),  with  Germany,  the  Dominican  Republic,  British 
West  Indies  and  Guiana,  Austria-Hungary,  and  Central 
American  states,  under  which,  in  return  for  certain  favors, 
we  admitted  free,  sugar,  molasses,  coffee,  hides,  until  the 
Wilson  tariff  was  passed;  under  the  provisions  of  the 
Dingley  law  we  have  made  agreements  with  France, 
Portugal,  Germany  and  Italy,  the  agreements  affecting 
however  but  few  articles.  Under  a reciprocity  treaty  with 
Cuba,  the  rates  upon  Cuban  products  are  20  per  cent  less 
than  the  regular  rates.  Products  from  the  Philippines  pay 
75  per  cent  of  the  regular  duties. 

President  McKinley’s  last  speech,  delivered  at  Buffalo 
the  day  before  he  was  shot,  contained  strong  words  for 
reciprocity : 

Our  capacity  to  produce  has  developed  so  enormously that  the 

problem  ot  more  markets  requires  our  urgent  and  immediate  atten- 
tion  By  sensible  trade  arrangements  which  will  not  interrupt  our 

home  production  we  shall  extend  the  outlets  for  our  increasing  sur- 
plus— We  must  not  repose  in  fancied  security  that  we  can  forever 

sell  everything  and  buy  little  or  nothing Reciprocity  is  the 

natural  outgrowth  of  our  wonderful  industrial  development The 

period  of  exclusiveness  is  past.  The  expansion  of  our  trade  and  com- 
merce is  the  pressing  problem.  Commercial  wars  are  unprofitable. 
A policy  of  good  will  and  friendly  trade  relations  will  prevent  re- 
prisals. Reciprocity  treaties  are  in  harmony  with  the  spirit  of  the 
times;  measures  of  retaliation  are  not. 

The  Republican  party  is  pledged  to  reciprocity.  Presi- 
dent Roosevelt’s  insistence  upon  the  ratification  of  the 
Cuban  treaty  is  well  known.  The  Democratic  party’s  stand 
upon  the  question  may  be  judged  from  the  following  ex- 
pressions culled  from  the  Congressional  Campaign  Book  of 
1902. 

Reciprocity  is  a device  for  making  one  friend  and  ten  enemies. 


The  Tariff  in  American  History 


35 


It  is  a sugar  coating  for  the  benefit  of  those  who  are  refusing  to  take 

their  protection  pills  straight There  is  nothing  in  it  for  the 

farmer It  hunts  foreign  markets  with  a club We  are  out  of 

pocket  a hundred  million  dollars  because  of  favoritism  shown 
Hawaii Annexation  has  made  reciprocity  perpetual.  . Our  ex- 

perience with  reciprocity  under  the  McKinley  bill  was  similar. 
Under  the  JDingley  law  the  mountain  has  labored  and  brought  forth 
a mouse.  Our  reciprocity  with  European  countries  is  too  petty  to 
discuss.  Cuban  reciprocity  would  be  of  the  Hawaiian  type. 

Because  of  the  difficulties  in  the  way  of  reciprocity  a few  Repub- 
licans are  favorable  to  a maximum  and  mimimum  tariff. 


Three  positions  should  be  defined.  Let 
the  Democratic  Congressional  Campaign 
Book  for  1902  and  the  Democratic  plat- 
form for  1900  speak  for  the  Democratic 


The  Trusts 
and 

The  Tariff. 


view: 


The  trusts  have  made  the  tariff  a very  practical  question.  Pro- 
tected from  outside  competition  by  high  tariff  walls,  we  have 
hundreds  of  trusts  that  charge  as  high  prices  for  their  products  as 

the  tariff  will  permit while  selling  in  foreign  markets  on  a lower 

level  of  prices  — The  tariff  ties  the  consumer’s  hands  while  the 
trusts  pick  his  pockets.  (Campaign  Book,  pp.  146-7.  Much  evidence 
is  given  to  show  that  since  the  passage  of  the  Dingley  tariff,  trusts 
have  been  formed  in  great  numbers,  that  they  have  advanced  prices 
at  home,  and  have  sold  more  cheaply  abroad) ....  And  from  the 
Democratic  platform  of  1900:  “Tariff  laws  should  be  amended  by 
putting  the  products  of  trusts  upon  the  free  list.” 

President  Roosevelt  may  speak  for  the  great  majority 
of  the  Republicans.  He  has  said  in  effect: 

Wages  are  higher  than  ever  before  in  our  history.  Every  effort 
should  be  bent  to  secure  the  permanency  of  this  condition  of  things 
— There  is  general  acquiescence  in  the  present  tariff  system. 
Nothing  could  be  more  unwise  than  to  disturb  business  by  any 

general  changes Yet  reciprocity  is  advisable Duties  must 

never  be  reduced  below  what  will  cover  the  difference  between  labor 
cost  here  and  abroad To  attempt  to  reach  trusts  thru  tariff  re- 

ductions would  be  ineffective.  Many  of  the  largest  corporations 
would  not  be  affected  in  the  slightest  degree  by  a change  in  the 


36 


The  Normal  School  Quarterly 


tariff  save  as  such  changes  interfered  with  the  general  prosperity  of 
the  country.  To  reduce  duties  would  be  to  ruin  first  the  small  com- 
petitors of  the  trust A commission  of  experts  might  well  be 

appointed  to  recommend  tariff  revisions. 

There  are  some  Republicans  who  are  not  disposed  to 
believe  with  President  Roosevelt  and  the  majority  of  their 
party.  Let  Governor  Cummins,  who  has  headed  this  op- 
posing view  speak  for  the  so-called  “Iowa  idea:” 

There  are  duties  that  are  absolutely  indefensible.  They  can  be 
reduced  greatly  and  still  the  American  manufacturer  will  occupy  the 

whole  American  market And  therefore  they  ought  to  be  reduced, 

not  years  hence  but  now  — We  who  believe  the  time  has  come  to 
make  certain  changes — do  not  favor  the  reduction  of  any  schedule 
below  the  point  at  which  the  American  manufacturer  can,  if  he  will, 
monopolize  the  whole  American  market  at  a fair  price.  We  stand 
for  tariff  duties  so  adjusted  that  the  potential  competition  from 
other  countries  will  prevent  producers  at  home  from  exacting  more 
than  a just  and  reasonable  price  for  what  they  produce  — “If  this 
citadel  of  protection  ever  falls  it  will  be  because  its  friends  make  the 
excesses  and  perversions  of  that  policy  so  obnoxious  that  they  ob- 
scure the  righteousness  and  the  glory  of  the  principle  itself.” 


Illinois 

State 


Reformatory 

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